When is the best time to file a bankruptcy?

For the majority of people, the best time to file bankruptcy is YESTERDAY.   In other words, the sooner the better.  Don’t wait.

Over the last 18 years of practicing bankruptcy, I have spoke with thousands of clients.  During all that time, I hear certain phrases over and over again.

“We’ve been robbing Peter to pay Paul”, “I am just treading water”, “We are drowning”, or “I will never get ahead.”

“I wish I would have filed bankruptcy sooner” or “I wish I had called a lawyer last year.”

Over the next few weeks and months in this blog, I will discuss the other statements.  Today, I want to discuss the last two statements.  They both regard the timing of seeking help from a bankruptcy attorney.

Many clients who come to see me are often on the fence about filing a bankruptcy.  For whatever reason, they may be scared to do so.  This fear or apprehension usually causes that person to delay seeking help from a bankruptcy attorney.  They just can’t bring themselves to pick up the phone and call.”

I often tell my clients that bankruptcy relief is not going anywhere.  If someone doesn’t file bankruptcy today, they can always file tomorrow.  Or next month.  Or next year.

But why not file today?  Why would someone wait to file a bankruptcy?

Well, there are many reasons to file for bankruptcy as soon as possible.   Some reasons are beyond one’s control.  Some reasons just appear and force people to file a bankruptcy.  Reasons like a wage garnishment, a car repossession or home foreclosure.  These reasons often arise against one’s wishes and then filing a bankruptcy becomes the only answer.  The person basically has no other choice.  In these situations, call an attorney immediately.  DO NOT WAIT.

However, some people have a choice.  Some people do have time or the luxury of waiting.  So why should this person file now?

Well, the first reason to file now is MONEY.  Every month that one has filed a bankruptcy is another month that no credit cards, medical bills or cash advances have to be paid.  Sure, the person could continue to make monthly payments on their credit cards and then file bankruptcy in six or seven months.  Like I said, bankruptcies are not going anywhere.  However, six or seven months of minimum payments followed by a bankruptcy will make NO difference to a credit card.   But that money could make a big difference to the person filing.  To put it another way; a credit card lender does not care if one files a bankruptcy on a $10,000 debt versus and $9,000 debt.  Those lenders have billions of dollars.  However, that $1,000 saved by the person can make a huge difference to them.

The second reason is basically the sooner a person files a bankruptcy, the sooner that person can start rebuilding their credit.  This will also be discussed in more detail in a later blog.

Finally, the last reason to file sooner rather than later is STRESS.   Like the phrases listed above, over the years I have heard the following hundreds of times:

“I feel like a huge weight has been lifted.”

“I was drowning but now I can breathe again.”

“Tonight, I will finally be able to get good night’s sleep.”

Put simply, less debt equal less stress

Personally, I am a worrier myself.  I understand the turmoil that stress can cause in a person’s life.  Further, medical studies have shown that stress can negatively affect one’s physical health.   For me, being able to remove stress from someone’s life is probably the main reason I enjoy what I do.  Nothing seems to give me more satisfaction.

If any of the above sounds like you, please call or email so I can help you too.